State Rep. Dan Ugaste (R-Geneva) argues the state’s ongoing pension crisis is being fueled by a simple explanation.
It’s the details of the solution that get more complex.
“What got us here is more promises were made than probably could be kept,” Ugaste told the Kane County Reporter. “Past government failures to properly fund pensions and refusing to address structural issues like property taxes also cause people to refuse to come here, and if they won’t come, we can’t grow the tax base.”
Illinois now faces a $530 billion pension shortfall, according to a new Wirepoints report. That equates to every one of the state’s 4.9 million households being on the hook for $110,000.
“The first thing is everyone hired going forward should go in a 401K-style program with matching contributions from state,” he said. “You can’t do defined benefits anymore. It just doesn’t work.”
Ugaste is quick to point out that as the state’s debt has grown, other issues have mounted, namely the state’s credit rating falling to the worst in the country. That comes alongside property taxes that are the nation’s second-highest and the second-largest population dip in the U.S. over the last decade.
Of the shortfall, $313 billion is owed to five state-run pension funds, $55 billion to state retiree health insurance, $9 billion to state pension obligation bonds. Data shows another $122 billion is owed to Chicago and Cook county pensions and retiree health, and $32 billion to other government pensions and retiree health.
Finally, with Pew Charitable Trusts finding Illinois’ state-level pensions just 39% funded, the lowest in the country, Ugaste said sees only one forward toward a successful pension plan.
“It will take more committed lawmakers,” he said, “individuals that want things to be different from the way they are now.”
This content was originally published here.